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Econoday Parrot Squawks Again after Sentiment Rebounds to 17-Year High

The Econoday parrot is once again squawking about consumer sentiment, long after any correlation between sentiment and consumer spending has been disproved.

After cooling in February and March, the consumer sentiment index is showing new strength. Preliminary April index is up 1.1 points to 98.0 which beats the Econoday consensus by 1 full point and Econoday’s high estimate by a 1/2 point.

Strength is centered in the current assessment, up 2 points to 115.2 which is a 17-year high. This offers a positive indication for April consumer spending. Expectations are also higher, up 4 tenths to 86.9 to signal confidence in the jobs outlook.

Despite the strength, inflation expectations are very subdued, unchanged at 2.5 percent for the 1-year outlook and unchanged at 2.4 percent for the 5-year.

The report notes that divergence in its sample between Republicans and Democrats has fully narrowed on the current assessment but remains unusually wide on expectations where Republicans see strength and Democrats weakness.

The 17-year high on the current conditions index, at a time when consumer spending is weak and GDP soft, is a reminder that high confidence readings have yet to translate to economic strength.

It would behoove the parrot to stop its expectation that spending will match sentiment because it hasn’t for over a decade.

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7 thoughts on “Econoday Parrot Squawks Again after Sentiment Rebounds to 17-Year High”

They must have a different parrot in the afternoon … Treasury monthly statement released yesterday at 2pm … no sugar coating from econoday:

“After March’s $176.2 billion deficit, the government’s deficit 6 months into fiscal 2017 is at $526.9 billion and running 15 percent over last year. The receipts side of the ledger is down 0.2 percent and includes an 18 percent decline in corporate income taxes. The outlays side is up 3.3 percent with net interest, reflecting comparatively high U.S. interest rates, up 15 percent and with Medicare showing a 4.8 percent gain. If not for special factors (calendar timing of receipts and payments), the government’s deficit would be a year-to-date $564.0 billion or 23 percent above last year. The next report is for the tax month of April and will be of special importance.”

In talking to other retailers, this so called sentiment must be in DC and no where else. Retail sales on real products and “not price increases” are way down. Don’t believe a thing they put out anymore…….

The serfs have been trained well. The banksters have told them that when “the market” is high, that means things are good. And like good serfian Pavlov dogs, they don’t want Massa to think they didn’t pay attention at camp.

Obamacare to the rescue, with higher health insurance rates and bigger deductibles boosting consumer spending. As health related expenses are becoming a much larger share of the economy, this should make up for tepid retail. Quite independent of sentiment.

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